Features of Debentures Quiz

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What is the effective return earned by a bond called?

Interest rate

Face value

Bond yield (correct)

Coupon payment

If a bond has a face value of $100 and pays an annual coupon of $10, what is its yield?

1%

10% (correct)

100%

$10

What is the term used for the price at which a bond is actually purchased in the market?

Face value

Bond yield

Actual purchase price (correct)

Coupon payment

What happens to the demand for a bond if the interest rates in the broader economy are lower than the bond's coupon payment?

Demand for the bond increases Signup and view all the answers

If the actual purchase price of a bond is higher than its face value, what can be inferred about the bond's coupon payment compared to the prevailing interest rates?

The coupon payment is higher than the prevailing interest rates Signup and view all the answers

Which of the following is NOT a feature of debentures?

Debentures form part of a company's equity capital. Signup and view all the answers

What is the main purpose of bonds issued by the government or government agencies?

To raise funds for capital expenditure and infrastructure creation. Signup and view all the answers

Which of the following statements about convertible debentures is correct?

They can be converted into shares. Signup and view all the answers

What is the difference between debentures and bonds in India?

There is no significant difference, and the terms are often used interchangeably. Signup and view all the answers

Which of the following is NOT a common type of debenture mentioned in the text?

Secured Debentures Signup and view all the answers

Features of Debentures Quiz

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Questions and Answers

What is the effective return earned by a bond called?

If a bond has a face value of $100 and pays an annual coupon of $10, what is its yield?

What is the term used for the price at which a bond is actually purchased in the market?

What happens to the demand for a bond if the interest rates in the broader economy are lower than the bond's coupon payment?

If the actual purchase price of a bond is higher than its face value, what can be inferred about the bond's coupon payment compared to the prevailing interest rates?

Which of the following is NOT a feature of debentures?

What is the main purpose of bonds issued by the government or government agencies?

Which of the following statements about convertible debentures is correct?

What is the difference between debentures and bonds in India?

Which of the following is NOT a common type of debenture mentioned in the text?

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